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Penalties encourage more taxpayers to submit returns on time

13 July 2015   (0 Comments)
Posted by: Author: Amanda Visser
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Author: Amanda Visser (BDlive)

The South African Revenue Service (SARS) received more than R670m in penalties during the 2013 tax season because of outstanding returns from taxpayers.

This has led to a decrease of 40% in the number of tax returns that were filed late during the following tax filing season.

SARS introduced the punitive administrative penalty regime through the Tax Administration Act, which came into force in 2013. SARS received more than 1.55-million outstanding returns from previous years in the 2014 tax season.

SARS spokesman Luther Lebelo said the huge decrease in late filings was also attributable to taxpayers who were more aware of their obligation and responsibilities as taxpayers.

In terms of the Tax Administration Act, SARS can raise an understatement penalty if a taxpayer fails to submit a return on time.

The penalty can range between 0% (where the taxpayer admits to his mistake before being audited) and 200% in the case of intentional tax evasion of the outstanding amount.

The 2015 tax filing season started on July 1 and within the first three days 323,325 tax returns were submitted. This is a decline of 2% from the same period during the previous tax season.

SARS is expecting 3.7-million tax returns from individuals and trusts to be filed during this tax season.

A contributing factor to the decline is the higher submission threshold. The mandatory submission threshold for tax returns has been increased from R250,000 to R350,000.

Mr Lebelo said the turnaround time for the assessment of filed tax returns had so far been three seconds.

"The assessment result is an estimate and does not take into account that the return could be stopped for an audit," Mr Lebelo said.

Several taxpayers have already been pestered by scam artists who claim that the targeted taxpayer is in line for a huge refund. One taxpayer, who has not even filed a tax return yet, has been promised a refund of more than R4,000.

South African Institute of Tax Professionals CEO Stiaan Klue warned taxpayers not open or respond to e-mails from unknown sources.

"Beware of e-mails that ask for personal, tax, banking or e-filing details as SARS will never ask taxpayers for such information in an e-mail. SARS has repeatedly stated that it will not request banking details through the phone, e-mail or on its own website," said Mr Klue..

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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